Durban - Small businesses will be hardest hit in the wake of the recent fuel price hike. According to Inkatha Freedom Party spokesperson on Economic Development in KwaZulu-Natal, Otto Kunene, rising fuel prices are eroding the competitiveness of local businesses as they are adding to the cost of doing business in an already depressed economy.
At midnight on Tuesday, the price for 95 octane petrol has increase by at least 18 cents per litre and that for diesel by 25 cents per litre. The price for 93 octane petrol will decrease by 4 cents per litre.
"We are worried that rising fuel costs will have a negative impact on SMEs since most micro enterprises are dependent on hired transport to fetch items from wholesalers and manufacturers. They must make a series of decisions to sustain their business models as fuel costs impact their supply and overhead expenses. This reduces the competitiveness of the smaller businesses. The rising business costs will likely lead to further retrenchments," he said.
Kunene said this is a worrying factor considering that the economy has already experienced a number of workforce retrenchments in various sectors over the past months, adding to the already high levels of unemployment.
He said companies that are focused on delivery and transportation are often heavily impacted by the fuel price increases.